13. April 2021
However, China`s concessions are primarily in areas where trade barriers were already low. The CSFTA is making little progress in areas of potential interest to the EU. B such as high value-added production (mainly vehicles) and professional services. The agreement hardly addresses other Chinese practices that attract the most persistent criticism from the EU and others. For example, while both sides commit to „adequate and effective protection of intellectual property rights and enforcing intellectual property rights,“ commitments remain vague and are consistent with previous joint statements between China and the EU. The bilateral dialogue on intellectual property rights and the annual meeting of the INTELLECTUAL property working group, set up by the CSFTA, do not appear to have made much progress beyond the original Memorandum of Understanding. The aim of free trade agreements is to open a market and improve the international environment of economic relations with key partners. These include the protection of intellectual property, which plays an important role in international trade. Switzerland has therefore committed itself, in its free trade negotiations, to agree on transparent and predictable rules for the protection of intellectual property rights, which are appropriate and applicable. These bilateral agreements between the EU and Switzerland are currently managed by some 20 joint committees. Benefits of agreements In 2013, 22.6% of Switzerland`s total exports will be concluded with free trade partners, with the exception of the free trade agreement with the EU. This represents 51% of Swiss exports to markets outside the EU. In particular, free trade agreements promote the growth, added value and competitiveness of Switzerland`s economic site.
China`s concessions under the CSFTA in the area of financial services and insurance services – another important interest of Switzerland and the EU – are weak. In the area of insurance, there are no additional concessions to China`s accession protocol, although there is greater specificity in the provision of activities authorized by the Chinese branches of Swiss companies. With regard to financial services, additional concessions apply only to securities trading, allowing Swiss companies to act on behalf of qualified institutional investors (QDII) in China, provide advisory services and provide childcare abroad. Swiss companies may also hold 49 per cent of joint ventures that carry out certain trade and subcontracting activities. In line with its commitments made by MFN WTO, the maximum participation of these joint ventures is 33%. Swiss joint ventures are also allowed to be subject to information, own-account trading and asset management transactions if they obtain the required authorisation. The EU is now China`s largest trading partner and would certainly be more ambitious than Switzerland in its relations with China. However, one of the key lessons of the U.S.-China trade war and the ceasefire agreed in the recent Phase 1 agreement is that China has sufficient capacity to withstand external pressure if the other side`s demands do not match the measures it wants to take in both directions. The agreement between China and Switzerland is much broader than the Phase 1 agreement, and it is reciprocal, but it confirms this pattern. Nevertheless, in all negotiations with China, from agriculture to steel and many types of labour-intensive products (such as clothing), the EU will naturally have its own defensive concerns and red lines. On the basis of this CSFTA review, we conclude that negotiations for a free trade agreement between China and the EU would be laborious to say the least.
Although the potential welfare benefits of developing trade relations between these two gigantic economies are far greater than those of an existing EU trade agreement, much will need to change before the terms of an agreement between China and L